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Seniors feel pinch from eliminated tax breaks

Andrew Kohsel is pictured in his home he built in Calgary, Alberta on March 7, 2013. Kohsel said he and his wife will feel the effects of a budget cut that will wipe out a program which provided property tax relief to seniors. "It's a bad idea," Kohsel says.

Photograph by: Leah Hennel
, Calgary Herald

Having built much of his northwest Calgary home himself, Andrew Kohsel is understandably proud of it.

Kohsel and his wife plan to spend many more years there, but he said a budget cut Thursday to a program that provides property tax breaks to seniors will have an impact on a fixed income already squeezed by rising costs for things like groceries and other necessities.

"Every little bit helps, and this is just one more thing we have to pay for," said Kohsel, a retired SAIT instructor.

"It's just one more thing the government is shoving at seniors to cover their costs."

Although Thursday's provincial budget maintains funding to several programs for low-income and vulnerable Albertans, the province found the money to do it by cutting nearly $100 million from programs for the unemployed and cutting off benefits to tens of thousands of seniors.

Kohsel and his wife are among an estimated 70,000 people who will no longer qualify for the Seniors School Property Tax Assistance Program, which gives rebates to seniors to cover year-to-year increases in property taxes.

This year, the program will be limited to individuals with an income under $31,625, or less than $63,250 for couples.

Provincial officials estimate the change will save the government $12.5 million.

The government is cutting the program altogether in 2014, moving instead to a property tax deferral scheme for seniors that will begin this year.

But unlike the soon-to-be-eliminated property tax assistance program, the tax deferral initiative is a low-interest loan - not a rebate.

Under the program, the province pays property taxes on behalf of the senior, who repays the amount, with interest, when they sell their home.

The government estimates it will pay $3 million in loans this year, with demand for the program growing to $34 million by 2015-16.

But Kohsel said he won't be among the takers, not wanting a hefty tax bill by the time he plans to sell his house.

"It's quite possible I could live in this home for another 20 years," he said.

"It's a bad idea."

Alberta Health, which administers several programs for seniors, also introduced changes to the Alberta Seniors Benefit that will make nearly 10,000 current recipients ineligible under the new rules.

Benefit claimants will no longer be able to exempt alimony payments, workers' compensation benefits and Canada Pension Plan disability payments from their income calculations.

The new rule will push approximately 6,000 seniors above the income cut-off of $25,100 for eligible individuals.

"The threshold should have been increased, but at the very least we shouldn't be kicking people off," said Kerry Towle, the Wildrose seniors critic.

Another 3,000 seniors will be removed from the rolls due to a change that will now require recipients to have lived in Canada for at least 10 years. The government said the rule mirrors federal Old Age Security eligibility requirements.

The Human Services department received a slight cut to its operating funds, shrinking $9 million to $4.258 billion, but funding to many major programs remained intact.

Funding for Assured Income for the Severely Handicapped, which provides benefits to approximately 47,000 Albertans, received a 4.4 per cent boost to $1.1 billion. However, the monthly maximum benefit - raised to $1,588 last year -remains unchanged.

The province boosted its budget for child care subsidies for low-income families to $270 million, a modest $5-million increase. The increase is designed to keep pace with demand for the program, which provides subsidies for families with a household income of less than $50,000 a year.

But these measures came with a cost elsewhere on the provincial ledger.

The government slashed $98 million from Alberta Works, which provides employment training, income support and health benefits to unemployed and under-employed Albertans.

The program provides applicants with grants to pay for educational upgrading, English as a second language classes, occupational training and other services. The total funding for these programs in 2013-14 drops to $883 million, down from $981 million last year.

With an unemployment rate that is the country's second lowest at 4.5 per cent, Human Services Minister Dave Hancock said fewer Albertans need Alberta Works programs and the government can afford to spend less.

"We've got a stronger economy, we have more job opportunities and less demand for some of the income support programs and some of the training supports," Hancock said.

But with Alberta experiencing labour shortages in areas like skilled trades, one advocacy group said it's unwise to cut job training programs.

"Last I heard, we have a labour shortage in Alberta - and there are lots of vulnerable Albertans looking for more job training, not less," said Bill Moore-Kilgannon, executive director of Public Interest Alberta.

Andrew Kohsel is pictured in his home he built in Calgary, Alberta on March 7, 2013. Kohsel said he and his wife will feel the effects of a budget cut that will wipe out a program which provided property tax relief to seniors. "It's a bad idea," Kohsel says.

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